Marketplace - Rich foods

Episode Date: December 11, 2024

Food prices aren’t going down. The good news is, they aren’t rising rapidly anymore, either. But we get it, grocery shopping still hurts. In this episode, why food isn’t likely to ever cost what it did five or 10 years ago, and how our habits are changing in response. Plus: The fight against inflation isn’t over, rising child care costs take women out of the workforce and the supply chain preps for an import wave.

Well, let's see. Is inflation bumpy? Is it stuck? There's gotta be a word. From American public media, this is Marketplace. In Los Angeles, I'm Kyle Rizdall. It is Wednesday today, December the 11th. Good as always to have you along, everybody. Today's macroeconomic word of the day is stall in its verb form, to stop or cause to stop making progress. The subject at hand, of course, is inflation, which rose 0.3% last month, so said this morning's consumer price index. 0.3% is, as it happens, the biggest bump we've seen since spring, and year over year, inflation is up three months in a row.

So how worried ought we be, if at all? Marketplace's Sabri Benishaw gets us going. Annual inflation back in September was 2.4 percent. Then in October, the number grew to 2.6 percent. Then in November, it grew again to 2.7 percent. So should we not be, I don't know, a little bit freaked out by that? I don't think so. Omer Sharif is president of research firm Inflation Insights. There's a lot of data that went into November's inflation number and some of it was a little wackadoodle, maybe threw off the final number a little. Hotel rates today in the data in November went up. On an annualized basis, they went up 45%. That is a wild number. Similarly, on the negative side, if you wanted to run a car or truck, on an annualized basis,

those prices declined by 31% today. Sharif says if you kind of tune these extremes out, price inflation in November wasn't three-tenths percent, it was closer to two-tenths percent. So that's much more encouraging. One of the biggest pieces of the inflation pie is the cost of having a roof over your head. And that is starting to look okay. Eric Winograd is chief economist at Alliance Bernstein.

What we've seen over the last few months is a significant moderation in shelter inflation. Rent and other shelter prices in November went up three tenths of a percent from the month before. Which is higher than you might like to see, but much lower than it has been. And it suggests that things are moving in the right direction. But a lot of people have issues with the rent data. It can lag by a year and a half, for example. So some economists like to take it out of the inflation equation just to see what happens. Jeffrey Roach is one of them. He's chief economist at LPL Financial.

So I look at excluding housing consumer prices are roughly one.6% up from a year ago, meaning it's a lot more reasonable and not really worthy of a freak out moment. Not a freak out moment, but also not totally sleeping easy either. It's definitely taking longer than people thought to get inflation down to a healthy level. In New York, I'm Sabri Beneshor for Marketplace. I'll take not a freak out moment, thank you. Wall Street today, tech was the place to be.

We will have the details when we do the numbers. It's both a truism and a principle of this program that economic headlines on, say, inflation might say things are mostly okay, but if people are not feeling that mostly okay in there every day, then the headlines just don't matter. Inflation is slowing, bumpy, but slowing. But when you're grocery shopping, those food prices still sting a little bit. Prices for food at home, economists speak for groceries, were up half a percent month on month in November. Marketplace's Kimberly Adams reports now on what that means for what people are putting

on the dinner table. It may be cold comfort, but says Ricky Volpe, who teaches agribusiness at Cal Poly San Luis Obispo. 2024 is a year of significantly below average food price inflation, where food prices will probably end up about 1.2, 1.3 percent above where they were in 2023. So actually about half that historical norm. And he gets it. It doesn't feel like things are normal or affordable when you're shopping at the store. People are looking for food prices to come down. And I mean, I should just say that that's probably not going to happen.

That's because at least some of the factors contributing to higher food prices are things like climate change, droughts that impact crop yields and meat prices. Beef prices were up more than 3% last month. And when it comes to poultry, says Nada Sanders, who teaches supply chain management at Northeastern University. The avian flu is something that has impacted hens, chickens, and then of course eggs. And so we've seen those prices be really volatile. And consumers have been responding to the higher prices,

adjusting their diets accordingly, and definitely cutting back on going out. Tom Bailey is a senior analyst for consumer foods at Robbobank. We are seeing a lot less demand for going out to restaurants. Transactions at restaurants were down 6% in the third quarter of this year. And even chefs are taking notice. Jonathan Poirot is a professor and chef at Johnson and Wales University, teaching students to design meal plans and recipes.

He says a lot of those now include less meat, including some of his own cooking. I was making some Mediterranean food the other night. Instead of using lamb or beef, I ended up just doing roasted chickpeas as the main protein source in the dish. Throw in a little sumac, lemon zest, and tahini, and he says it was delicious. In Washington, I'm Kimberly Adams for Marketplace. Waymo, the autonomous ride hailing company, opened up shop here in LA about a month ago. If you've never seen them, they are quite something.

All white electric SUVs, Jaguars as it happens, covered with cameras and sensors pointing every different direction and a very empty, noticeably so, driver's seat. The company, a subsidiary of Alphabet, is betting billions of dollars that they are the future of automotive transportation. John Gravois and a team at Wired spent a day tailing a Waymo car to see what that future might look like. John, thanks for being here. Thank you very much.

Well, of course, anything is better than sitting around the office or in your living room in front of your computer. Why did you guys decide to do this? Well, San Francisco has a history in car chase cinema and we figured that the best way to make self-driving cars strange again for us was to go chase one. So we should say here, it's old hat to you guys in San Francisco, but unless you're in San Francisco, I guess, where's the other one? Phoenix and I've seen some here in LA.

It's a foreign thing for a whole lot of people. Exactly. That's what we wanted to restrangify it. All right. So talk methodology here. How'd you go about it? So we hired a an Uber driver to drive a chase car with a bunch of us in it and picked a Waymo by summoning it on the Waymo app and then tailed it. And the plan was to have the journalists, some of us, get out of the car and interview writers as they were let out, which we did,

but it took a little while for the Waymo to pick up anybody. Yeah, I was gonna say, I mean, it's, you know, I don't want to spoil it as much as you can spoil a magazine article, but it was a tad anticlimactic. Yeah, it was interesting in itself to go from one weird staging lot full of empty self-driving cars to another for the first several hours of the day. But that's what we did.

What kinds of reactions did you get from people once you tracked them down? What did they say about their experience in this driverless car? You know, that, it was pretty, it was pretty uniform and impressive how much people just love it. They just like the experience of the drive, I guess, is, is a little bit less herky jerky than with a human driver. But I think a lot of it just comes down to people are just kind of relieved not to have to talk to somebody else as sad as that is. Especially it was sad for us because we were having a great

conversation in our chase car. Tell me about Gabe, your Uber driver, and his thoughts on this whole thing because that was super interesting. Yeah, yeah. So Gabe, this is a guy whose labor is directly at stake. He's a guy whose labor is going to be replaced by a Waymo. He's a guy who's had 30 years of experience as a professional driver. First, as a taxi driver, he was a... He even organized a taxi driver's strike in the days before Uber. And his first, I think his prejudice with Waymos,

having shared the road with him, you know, sort of sporadically, he thought of them as kind of dopey rule following, frustrating vehicles to share the road with. But over the course of the day, he started to recognize that the Waymo was driving a lot like a taxi driver, the Waymo was doing things that were aggressive, that are exactly the kinds of things that a taxi driver is trained to be aggressive with. And doing things that were cautious, that are exactly the kinds of things that taxi drivers are trained to be cautious with.

Can we talk unit economics here, just as a matter of this is of course gonna be a business. Waymo is, according to the math from a study you guys site, they're not making a whole lot of money per vehicle, right? And eventually they're gonna scale and it's gonna work out. But for the moment, even though they've gotten 11 billion something dollars, they're not turning a whole lot of profit here.

Yeah, that's a big question. And the math is, even that study is based on a lot of guesswork. It's really hard to say what the unit economics are. What we can say is that the ridership rates are going up so fast that that study is already at well out of date. When we were doing our chase, I think the monthly ridership for Waymo was 100,000 rides a month. By October it was already a hundred fifty thousand rides a month. So the economics are just shifting under our feet a lot. Yeah Are you among the Waymo rider faithful? Have you done it? What'd you think?

I do not have an account of my own but I've been I've been on rides with other people and You know, it was it experience. It was, you get, you're a little nervy when you step in and then very quickly it becomes normal. Yeah, yeah. John Gravois in Wired with a whole team of people following away around for a day. John, thanks a bunch. Thank you. Coming up.

While some might think, you know, you should be enjoying retirement. Guess what? I am. If you love what you do, you will never work a day in your life, right? First though, let's do the numbers. Dow Industrial is off 99 points today two tenths percent finished at 44,148 the Nasdaq surged 347 one and eight tenths percent 20,034 Nasdaq passing the 20,000 barrier for the first time the S&P 500 added 49 points eight tenths percent 6,048.

So, 6,084 rather, 6,084. Among the categories where prices are rising, getting back to inflation, housing, food, furnishing used in new vehicles and healthcare. So, in no particular order, Mid-America apartment communities, one of the biggest owners of rental housing in the United States, down a 10%.

General Mills, maker of everything from cereal to snacks, descended 1%. Wayfair, one of the biggest online furniture retailers, up four tenths of one percent. Today you're listening to Marketplace. Hey, this is Kimberly Adams, co-host of Make Me Smart. Listen up because for this week Kimberly Adams, co-host of Make Me Smart. Listen up, because for this week only, we are offering all Marketplace merchandise at a discount. So you can snag our popular Marketplace sweatshirt for just $8 a month, or maybe you and the investor in your life could use some matching glass mugs. That's only $5 a month. We're even offering our brand new Merino wool socks featuring Kai, David, and yours truly for a one-time gift of $15. These deals won't last long. It's our way of thanking

you for getting your year-end donation in a little bit early. This offer expires at midnight on Friday. So don't wait and get yours now at Marketplace.org slash donate. This is Marketplace. I'm Kai Rizdal. Alright, here's another data point from today's CPI. The cost of child care last month went up six-tenths of one percent. To be clear, that is not year over year. That is November alone, and that kind of increase has been happening for years. The average cost to enroll a child in licensed daycare in this country is more than $15,000 per child per year.

And that's affecting parents exactly the way you'd think it's affecting parents, maybe more so. Stacey Vanek-Smith has that one. Amber Lord knew she wanted to keep working after she had her baby. She was in her late thirties and she had a career she loved in marketing. But when Lord and her husband started looking at daycares near their home in Virginia Beach,

they ran into a problem. They were 25,000 a year. That was for four days a week. And even on those four days, daycare didn't cover an eight-hour workday. They would need supplemental care on top of that. We were like, okay, we can't make this make sense. I would just be working 100% of the time to have my child in childcare 100% of the time. Lorde's husband was the bigger earner, but her paycheck was vital.

They needed her income to afford their mortgage. We might have lost our house. I mean, it was that bad. And Lorde wasn't going to be able to shift her position to part-time. The stress got so bad, Lorde started to worry it was affecting her pregnancy. So I left. Lorde had just walked away from a job she loved, and her family's money situation was now very shaky. I came home and I sat in a new house that we just bought. And I'm just sitting here crying pregnant and just feeling like there's no village.

There is no village. Like, I live in a country where they don't care. The cost of preschool and daycare has risen by about 26% since 2019, according to the government's monthly inflation numbers. Lorde says it's created a crisis. When she posted about her dilemma on TikTok, thousands of women wrote to her.

So many other mothers told me this. It makes more sense financially for them to stay home and take care of the baby and just live strapped on their husband's paycheck. Lord also hears from women who have had to keep working, but because they couldn't afford the child care they wanted, were forced to leave their children in situations they did not always feel great about. Lord says she hears these stories every day about how the rising cost of child care is forcing women to make really tough choices.

You're asking young families to spend, you know, a college tuition to have their child taken care of. Lauren Bauer is an economist with the Brookings Institution. We give people 20 years to save up for college and we give them no time to save up for childcare. She says all of this is happening right after mothers had been entering the workforce in record numbers. This post-COVID environment was really good for women. We got this boost of additional child care funds, the boost of telework flexibility, the boost of a hot labor market, and we are seeing all of those things dissipate.

The money has definitely dissipated. The Biden administration's $24 billion child care subsidy expired last year. At the same time, the cooling job market has companies scaling back flexible work. The results, the share of working mothers with children under five has dropped from nearly 71 percent

last year to 68 percent. What that meant, that's hundreds of thousands of women dropping out of the labor force in the past 18 months. Nobel Prize winning economist Claudia Golden has spent her career studying women, work, and the labor market. She says the biggest thing any country can do to support women working is to lower child care costs. Every country that has highly subsidized child care has pretty high levels of female labor

force participation, Sweden being a good example. Also Canada, France, and Germany have all seen women's labor participation increase after government subsidies reduced child care costs. Back in Virginia Beach, a very pregnant and newly unemployed Amber Lord decided she would make her own job. She used her skills in social media and marketing to start a consulting business. I really went hard. So I pretty much replaced my previous income like within the first year. That would be Lorde's two-year-old son, Henry, in the background.

He's running around chatty. As much as Lorde has loved being home with Henry, she does wish she could have him in daycare part-time. Because we just spend every waking moment together face to face, which is, you know, great. It's very cool. I love him to pieces. He's the best thing that's ever happened to me. But just to give me some free time. To work, to get things done, or just to rest. In New York, I'm Stacey Banach-Smith for Marketplace.

While one predicts the future at one's peril, it's entirely possible that the work of getting goods into and around this economy could get a lot more expensive and complicated in the new year for two reasons. First, on the 15th of January, a temporary agreement between dock workers and port operators on the East Coast expires. That was the deal, you'll remember, that the two sides made after that quick strike back in October. And reason number two is that five days after that quick strike back in October. And reason number two is that five days after that, on January 20th, President-elect Donald

Trump takes office, bringing with him those promises of broad-based tariffs, which gets us to this. The National Retail Federation reported this week that imports have been rising and could remain high as companies try to get ahead of those disruptions. I know you thought, perhaps hoped, that supply chain stories were a thing of the past, but higher imports are going to stress all the links in the supply chain, shipping, trucking, even warehouse space. Marketplace's Henry App reports.

One good result of the mess the pandemic made of the supply chain is that companies invested in more capacity. But it took a while, says Jason Miller at Michigan State University. To go from the idea of we would like to put a warehouse in this location to having a facility open that can now store goods, that is an extended process. Now that extra warehouse capacity ordered a few years ago is available, says Joe Dunlap at Legacy Investing.

There's been a ample amount of warehousing space for the past 12 months or so. Which means all that stuff coming into the U.S. right now has a place to get stored. And a lot of it is coming to the West Coast, says Ian Britton. He manages industrial real estate for CBRE in Southern California. The companies that we've interviewed are taking in anywhere from 20 to 25 percent more finished goods and components in anticipation of tariffs. Britton says companies have also shifted west because of the strike threats in the east. Normally, he says, all those extra imports would translate to an uptick in companies

leasing out that available warehouse space. But it hasn't just resulted in that direct correlation of leasing volume like we've typically seen in typical cycles. That ample warehouse space is now verging on a glut. One part of the supply chain that's a bit tight, says Jason Miller at Michigan State, are railroads in the West. They've been busy transporting those record volumes of

freight from Western ports. And that type of prolonged strain does cause some kinks to emerge in the system. For now, he says, if the railroads get too tied up, there's plenty of capacity in the trucking sector too, which can take the pressure off. I'm Henry Abb from Marketplace. I know I ended the program yesterday with a report from Pew Research showing a majority of you are satisfied with your jobs. Counterpoint, a survey from Gallup that says 51% of American workers are watching for or actively seeking a new job.

So maybe the grass is always greener, but making that leap into a new job or a career can be daunting, and it can be daunting no matter how old you are. Here's today's installment of our series, My Economy. I am Dr. Michelle McKinney-Jones, and I am a faculty fellow in management at Dalmont University in Nashville, Tennessee. So after 31 years in corporate America, and at the age of 55, I retired and made a career

switch into higher education on July 1st. Being in one profession for 31 years gives you an appreciation for that profession. And it's also something that never leaves you, right? I often have my HR hat on when I'm sitting in faculty meetings. Maybe there's a comment that said, and I'm like, ooh, I'm glad I'm not in HR right now to be able to address that.

Or, you know, maybe it's something that a student says if we're doing an exercise and how they're role playing as an HR professional and perhaps they say something that I'm able to advise them to say, hey, that would not be an appropriate comment. Let's talk about how we can either say that differently or do that differently to make sure that we get the desired outcome.

So yeah, I'm always wearing my HR hat, but now I get to wear too. Certainly the salary as a faculty fellow does not compare to what I made in the corporate space. And so there's some adjustment there, but the decision that I made to go into higher ed, does it outweigh all of those other things? Absolutely.

And so would I do anything different? Absolutely not. And while some might think, you should be enjoying retirement. Guess what? I am, every day, I'm doing something that I enjoy doing. And it is continually what fuels me each and every day. And when I see a look on the student's face, when a light bulb goes off on something

that we're talking about and they finally get it, that's the most rewarding thing ever. It's the best. It is the absolute best. Dr. Michelle McKinney Jones, she is a faculty fellow at Belmont University in Nashville, Tennessee. Here's a true story. I started as an intern in public radio when I was 34. Two careers behind me. So it can work out. Tell us what's going on with you, would you? You can do it at Marketplace.org slash My Economy.

This final note on the way out today. After the idea was approved by team owners back in August, today the deal finally got done. The NFL's Buffalo Bills and the Miami Dolphins have each sold minority ownership stakes, 10% to be exact, to different private equity groups. Key points of the approval are that those stakes have to be held for at least six years, and one private equity group can hold interest

in as many as six teams. There is a teensy tiny bit of, could possibly go wrong here, rattling around in the back oh my brain. Our media production team includes Brian Allison, Jake Cherry, Jessen Duller, Drew Jostad, Dario Keefe, Charlton Thorpe, Juan Colorado and Becca Weinman. Jeff Peters is the manager of media production and I'm Kai Rizdal. We will see you tomorrow everybody. And I'm Kyle Rizdal, we will see you tomorrow everybody. This is APM.